Lower access prices encourage independent operators to compete for share of UK business mail market
UK Mail is the first independent mail operator planning to use Royal Mail’s delivery offices to win a larger chunk of the lucrative business mail market, writes Marianne Brun-Rovet.
It is a subsidiary of Business Post, the quoted company which will today announce full-year results. At the price proposed yesterday many others should soon follow. Hays, which runs a document exchange service, Holland’s TPG, Germany’s Deutsche Post and Express Dairies all have either interim licences or seven-year licences to compete with Royal Mail. These allow them to carry and sort bulk mail as well as provide document exchange and guaranteed delivery services.
Express Dairies can even deliver certain items on its milk floats. But none has been able to establish a national door-to-door network to rival Royal Mail’s. Deutsche Post has tried, by agreeing to use the national operator’s delivery network at a steep 21p for each first class item. But it has called the terms “uncommercial” and said it would not expand the trials. A cheaper access price would add to Deutsche Post’s UK operation sorting international mail and complement its plans to run mail rooms in large companies and set up document exchanges. Postcomm’s proposed prices, which will go out to consultation, should encourage rival operators to hit the market hard.
TPG and Deutsche Post have indicated they want a market share of 5-10 per cent in three years, when Postcomm will introduce the next wave of market opening. TPG Post UK, which employs 18,000 staff in the UK, wants to establish a “total document chain”, offering business customers everything from paper production to delivery. Hays, which is the first to get a one-year interim licence, has said that, without an access code, market opening means little. But Hays warns that an access price that is too low and damages Royal Mail would not benefit any independent operator.
Copyright © 2003: Financial Times Group
